MIDWAY MAKES HQ CONNECTION

Vanguard Airlines Inc. is expanding its presence at Midway Airport as it negotiates with the city to move its corporate headquarters to Chicago from Kansas City, Mo.

"We see that there is a market here and we want to be a part of it," says Vanguard CEO Robert J. "Rocky" Spane.

The 900-employee airline is working with the city's Department of Aviation to obtain more gate and hangar space before planning its move to the Southwest Side.

Vanguard, which operates an 11-plane fleet between Midwest cities and Myrtle Beach, S.C., Pittsburgh and Dallas, is the third-largest carrier at Midway and is rapidly outgrowing its gate space.

It operates 19 daily flights here and hopes to increase to 23, the same number it runs out of Kansas City. But 13 of its flights are out of a single gate at Midway -- about twice as many flights as are typically run from a gate.

If it could find more places to park its planes, Vanguard would increase Midway service immediately, says Russell Winter, vice-president of marketing and planning. "We would like to move fairly aggressively on this. Since we're ready to move, we hope we can reach a deal soon."

Several small airlines fly in

The airline, which last year posted its first annual operating profit since its founding in 1994, is feeling some time pressure because of a pending deal to lease "a significant number" of planes larger than the 737-200s it currently flies, Mr. Winter says. "Our preference would be to put the new planes in Chicago."

The city recently procured an additional gate for Vanguard and is working to help the airline obtain hangar space -- a key element of the negotiations to bring Vanguard's headquarters to Chicago, says Aviation Commissioner Mary Rose Loney. "We have a number of facilities we own on the site," she says.

Additionally, says Ms. Loney, the city is drafting a document to add Vanguard to the airport's short list of "signatory" carriers. The agreement would set rates and charges for gate use and would ensure that the airline had rights for gate use through 2012.

Midway's other signatory carriers are Southwest Airlines, American Trans Air (ATA), Northwest Airlines and Continental Airlines.

Midway -- now in the midst of a $761-million reconstruction project that will increase the number of gates to 41 from the current 29 when it's completed in 2001 -- has attracted the attention of several smaller airlines in recent months.

Detroit-based Pro Air Inc. began flying from Midway to Detroit on Jan. 28. MetroJet, the discount arm of U.S. Airways, began daily flights to Washington, D.C.'s Dulles Airport in May. National Airlines, a startup bankrolled by two Las Vegas casinos, began two daily flights from Midway to Las Vegas on May 27.

The Aviation Department reports passenger traffic at Midway was up about 19% through April, compared with 1998, making it the fastest-growing airport in North America.

ATA expanding at Midway

ATA, a subsidiary of Indianapolis-based Amtran Inc., also has expansion plans at Midway. The airport's second-largest carrier after Southwest Airlines, ATA has 1,561 employees in Chicago, up from 1,336 a year ago. ATA ran 1,022 departures out of Midway in June, up 42% from a year earlier and more than four times the number of departures from its Indianapolis base.

Additionally, the airline was one of the main proponents, along with Mexicana, of adding international service at Midway. It currently flies from Indianapolis to Cancun and would like to start similar service out of Midway, says a company spokeswoman.